Thanks for the info.
I've been visiting family for two weeks, and have been out of the loop, so i really appreciate the work the SI members have been doing. When I can't contribute much, it sure is nice to have others who are collecting, posting, and analyzing info.
From my short read of the earnings announcement, i was surprised by two things. First the revenues came in a bit under my estumate, and my guess is that without additional acquisitions, the company would be hard pressed to hit $1B in revenues for the year ending March 98. The lower revenues were pretty much "telegraphed" to the financial community during the road show. But next quarter is shaping as a "barn-burner in terms of revenue growth. I expect revenue growth of over $50M sequentially, from the new expansions in SJ, Mexico, China. If Sweden also shows some revenue growth, we could see even more than 50M.
The other surprise was the margin improvement. The margin improved to over 5.6% (before taxes, interest, and amortization of goodwill). This is a significant imrovement, and indicates to me that recent acquisitions have good margins (for the ECM sector) of 7-8%. Not only are the revenues growing very fast, but the acqusitions and expansions are leading to margin improvement. It seems to me that Marks is picking up these acquisitions at very good prices, in spite of what some in the industry implied.
I haven't had a chance to analyze the Neutronics deal, but based on your post info, and because of the strategic nature of the move into Eastern/Central Europe, the deal looks really good to me so far. If there is a one time write-off of $4M, so what! The indications we have so far on these deals; the favorable pricing of the deals, the strategic combination considerations, and the good margins we seem to be seeing on the acquired businesses, overwhelm these one time charges. I've argued that on this thread for a long time, and nothing I've seen has changed my mind. I look forward to doing a more complete analysis of the Neutronics deal.
Flextronics remains my largest stockholding by far. I think Marks is one of the best ECM managers in the current ECM envirionment.
Paul |
